Diesel exhaust fluid (DEF) is an odorless, colorless, and non-flammable mixture of 32.5% urea and 67.5% deionized water. The standardized AUS 32 form is used as a consumable in selective catalytic reduction (SCR) in order to lower Nitrous oxide (NOx) concentration in the diesel exhaust emissions from diesel engines. DEF vaporizes and decomposes into ammonia and carbon dioxide inside the exhaust pipe that react with oxygen and detrimental nitrogen oxides inside the vehicle’s selective catalytic reduction (SCR) catalyst. This results in production of nitrogen, water vapor, and carbon dioxide. As the shelf life of DEF is directly related to the temperature at which it is stored, special storage tanks made up of polyethylene plastic or stainless steel are used to maintain its quality.
Global diesel exhaust fluid market was valued at US$ 11.60 Mn in 2021 in terms of revenue, exhibiting a CAGR of 7.67 % during the forecast period (2022 to 2030).
Drivers
The demand in the DEF aftermarket is influenced by factors such as the increasing average age of vehicles, improving infrastructure, increasing number of vehicles on roads, average miles driven, replacement cycles of DEF, and rising concerns towards maintenance of vehicles. Due to the increasing average age of vehicles, the number of vehicles on the road is increasing. Additionally, factors such as stringent emission regulations implemented across countries are expected to generate demand for SCR globally. For example, under Euro VI norms, there is a drastic decline in NOx limits. Hence, Tier-1 and OEMs are employing SCR as an after-treatment technology. These factors together influence the demand for DEF in the aftermarket.
It is expected that the recovery of the automotive industry will promote the demand for DEF, which in turn will drive the recovery of the diesel engine exhaust fluid market. Even after the lockdown is completely lifted, auto sales and production are not expected to fully resume due to challenges related to the supply chain, workforce, and government prevention guidelines. In this scenario, the COVID-19 outbreak is expected to have a moderate impact on the diesel exhaust fluid market. Major automobile manufacturing countries such as China, Japan, Germany, and the U.K. have all been severely affected by the pandemic. In 2020, car sales and average mile driven in these countries is also dropped significantly
Figure 1. Global Diesel Exhaust Fluid Market Value Share (%), By Region, 2021
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Market Restraints
The diesel vehicle penetration is decreasing in most of the regions. Major factors hampering the diesel vehicle demand includes vehicle manufacturers shifting away from diesel technology in response to tighter NOX emission standards and real-driving emissions testing. Incidences like 2015 emissions scandal which changed the consumer choices in the wake of the defeat device scandal and manufacturers like Volvo to Nissan have vowed to phase out this fuel type, has hampered the diesel vehicles sales in the recent years. Diesel vehicles have broad implications for the cost of attaining CO2 emission targets and the magnitude of fleetwide NOX emissions further increasing the vehicles prices. Thus, increasing cost of diesel vehicles is also factor of concern for vehicle buyers. Diesel exhaust fluid demand is directly related to the diesel vehicle sales, thus, decline in diesel vehicle sales is expected to limit the growth of the DEF market during the forecast period.
Diesel Exhaust Fluid Market Report Coverage
Report Coverage | Details | ||
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Base Year: | 2021 | Market Size in 2021: | US$ 11.60 Mn |
Historical Data for: | 2017-2020 | Estimated Year: | 2022 |
Forecast Period 2022 to 2030 CAGR: | 7.67 % | Forecast Period: | 2022-2030 |
Geographies covered: |
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Segments covered: |
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Companies covered: |
Yara International, BASF SE, CF Industries Holdings Inc., Agrium Inc., Cummins Inc., Shell ROTELLA (Royal Dutch Shell Inc.), Mitsui Chemicals Inc. and KOST USA |
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Growth Drivers: |
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Restraints & Challenges: |
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Increasing Demand for Electric Vehicles
Rising trend of electric vehicles on the back of increasing awareness for the environment amongst the population, along with the concern for fluctuating oil prices, increasing demand for vehicles that run on alternative sources of energy and difficulties observed in processing urea are some of the factors anticipated to act as a key restraint factor towards the growth of the global diesel exhaust fluid (DEF) market.
Market Trends
Among vehicle type, passenger vehicles is projected to be the fastest growing segment over the forecast period. Most of the commercial vehicles are equipped with the Selective Catalytic Reduction technology after implementation of EPA’s 2010 diesel emission standards. Moreover, favorable growth in passenger vehicle sales is projected to create positive environment for market growth. According to European Automobile Manufacturer’s Association, in November 2017, sales of passenger cars in Europe grew by 5.9% year on year. Therefore, passenger vehicles segment represents an immense opportunity for growth of diesel exhaust fluid.
Figure 2. Global Diesel Exhaust Fluid Market value Share (%), By Storage Solution, 2021
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Recent Developments
Competitive Section
Major players operating in the global diesel exhaust fluid market include Yara International, BASF SE, CF Industries Holdings Inc., Agrium Inc., Cummins Inc., Shell ROTELLA (Royal Dutch Shell Inc.), Mitsui Chemicals Inc. and KOST USA.
Frequently Asked Questions
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